how did the aca influence the longterm future of medicare

ACA has improved the lives of the millions of Americans and their families who count on Medicare for their health insurance coverage. The law ensures that future generations will have access to benefits by strengthening the Medicare trust fund and by supporting delivery system reforms that will help reduce the growth in health care costs.

Full Answer

How will the Affordable Care Act impact Medicare and other programs?

By moving Medicare away from fee-for-service payment and by holding health care providers accountable for both the quality and total cost of care, certain ACA reforms have the potential to reshape not just the Medicare program but the entire U.S. health care system.

How many Americans have gained health insurance under the Affordable Care Act?

About 20 million Americans have gained health insurance coverage since the ACA was enacted. The ACA’s coverage gains occurred across all income levels and among both children and adults, and disparities in coverage between races and ethnicities have narrowed.

How did the Affordable Care Act change the tax code?

The ACA also changed the tax code as a way to increase revenue for the Medicare program. Starting in 2013, the Medicare payroll tax increased by 0.9% (from 1.45 to 2.35%) for individuals earning more than $200,000 and for married couples with income above $250,000 who file jointly.

What does the Affordable Care Act (ACA) mean for You?

The ACA also prevents new physician-owned hospitals from contracting with Medicare, and prohibits current physician-owned hospitals (that work with Medicare) from expanding.

How did ACA impact Medicare?

Medicare Premiums and Prescription Drug Costs The ACA closed the Medicare Part D coverage gap, or “doughnut hole,” helping to reduce prescription drug spending. It also increased Part B and D premiums for higher-income beneficiaries. The Bipartisan Budget Act (BBA) of 2018 modified both of these policies.

How did the ACA affect long-term care?

The ACA implementation has increased Medicaid payments, and quality of care has been improved through a decrease of readmissions, ulcers, and falls in long-term care facilities.

How will ACA repeal affect Medicare?

Dismantling the ACA could thus eliminate those savings and increase Medicare spending by approximately $350 billion over the ten years of 2016- 2025. This would accelerate the insolvency of the Medicare Trust Fund.

How has the ACA impacted healthcare?

The ACA enabled people to gain coverage by 1) expanding the publicly funded Medicaid program to cover adults with annual incomes up to 138% of the federal poverty level; 2) establishing the Health Insurance Marketplace for individuals and small businesses, allowing them to purchase private health insurance (PHI); and 3 ...

What are the provisions of the Affordable Care Act that directly impact long-term care providers?

Long-Term Care Provisions in the Affordable Care ActNursing Home Transparency and Improvement. The nursing home transparency provisions are the first comprehensive improvements in nursing home quality since OBRA '87. ... Elder Justice Act. ... Patient Safety and Abuse Prevention Act. ... Home and Community-Based Services.

How did the ACA affect care delivery and what was the impact on nursing?

The groundbreaking Patient Protection and Affordable Care Act (ACA) compels nurses to continue innovation, transformational leadership, and care coordination as major stakeholders in provision of the next generation of cost containment, quality advances, and patient access improvements.

Is Medicare Advantage Part of the Affordable Care Act?

The ACA does not eliminate Medicare Advantage plans or reduce the extra benefits they provide. It is up to each private insurer to decide what extra benefits to offer (they are required to offer all benefits covered by traditional Medicare).

Is the Affordable Care Act the same as Medicare?

In the simplest terms, the main difference between understanding Medicare and Obamacare is that Obamacare refers to private health plans available through the Health Insurance Marketplace while Original Medicare is provided through the federal government. The groups each serve are also very different.

Did the ACA cut benefits for people in the traditional Medicare program?

The ACA gradually reduced costs by restructuring payments to Medicare Advantage, based on the fact that the government was spending more money per enrollee for Medicare Advantage than for Original Medicare. But implementing the cuts has been a bit of an uphill battle.

How does the ACA improve access to healthcare?

The ACA uses two primary approaches to increase access to health insurance: It expands access to Medicaid, based solely on income, for those with incomes up to 138% of the federal poverty level (FPL), and creates eligibility for those with incomes from 139% to 400% FPL to apply for subsidies [in the form of advance ...

What did the ACA accomplish?

Access to mental health care improved. The expansion also reduced racial and ethnic disparities in both coverage and access to care. Among other improvements, the gap in uninsured rates between white and Black adults shrank by 51 percent in expansion states, but only 33 percent in non-expansion states.

How did the ACA reduce Medicare costs?

Cost savings through Medicare Advantage. The ACA gradually reduced costs by restructuring payments to Medicare Advantage, based on the fact that the government was spending more money per enrollee for Medicare Advantage than for Original Medicare. But implementing the cuts has been a bit of an uphill battle.

When did Medicare start phasing in?

In 2011, the law froze the benchmark amount at 2010 levels for the maximum amount paid for MA plans in each county. Then, in 2012, the government began phasing in payment reductions to Medicare Advantage in an effort to bring Medicare Advantage spending in line with the fee-for-service program (Original Medicare), although benchmark amounts could also increase based on plan quality.

What is Medicare D subsidy?

When Medicare D was created, it included a provision to provide a subsidy to employers who continued to offer prescription drug coverage to their retirees, as long as the drug covered was at least as good as Medicare D. The subsidy amounts to 28 percent of what the employer spends on retiree drug costs.

How much will Medicare Part B cost in 2021?

In 2021, most Medicare Part B enrollees pay $148.50/month in premiums. But beneficiaries with higher incomes pay additional amounts – up to $504.90 for those with the highest incomes (individuals with income above $500,000, and couples above $750,000). Medicare D premiums are also higher for enrollees with higher incomes.

Why did Medicare enrollment drop?

When the ACA was enacted, there were expectations that Medicare Advantage enrollment would drop because the payment cuts would trigger benefit reductions and premium increases that would drive enrollees away from Medicare Advantage plans.

What percentage of Medicare donut holes are paid?

The issue was addressed immediately by the ACA, which began phasing in coverage adjustments to ensure that enrollees will pay only 25 percent of “donut hole” expenses by 2020, compared to 100 percent in 2010 and before.

How many people will be on Medicare in 2021?

However, those concerns have turned out to be unfounded. In 2021, there were 26 million Medicare Advantage enrollees, and enrollment in Advantage plans had been steadily growing since 2004.; Medicare Advantage now accounts for 42% of all Medicare beneficiaries. That’s up from 24% in 2010, which is the year the ACA was enacted (overall Medicare enrollment has been growing sharply as the Baby Boomer population ages into Medicare, but Medicare Advantage enrollment is growing at an even faster pace).

How did the ACA affect healthcare?

The ACA’s coverage expansion in 2014 spurred a spike in spending, as would be expected. These provisions allowed millions of people to get health insurance through the exchanges and through Medicaid expansion. Health care costs increased by 5.3 percent in 2014, from a low of 2.9 percent in 2013. The Office of the CMS Actuary estimated that increased use of health care services accounted for nearly 40 percent of the increase in per-capita health spending. Health costs grew by 5.8 percent in 2015, and preliminary estimates by the Altarum Institute indicate a steady growth rate of 5.4 percent over 2015.

How did the ACA help Medicare?

The ACA provided a regulatory framework for containing costs in Medicare by setting a per capita target for spending growth and creating a 15-member Independent Payment Advisory Board (IPAB) to develop a plan to reduce spending if that target is exceeded. What the board can recommend is constrained: by law, it cannot raise premiums, reduce benefits, or increase cost sharing, meaning that their recommendations are mostly confined to cuts in provider payments. The board’s proposals become law unless Congress explicitly overrides them. Spending did not exceed per capita targets in the ACA’s first three years, and therefore IPAB was not triggered. The IPAB currently has no members, which reflects a congressional majority strongly opposed to its existence. IPAB has been targeted for repeal on a bipartisan basis and is not likely to survive as a cost containment mechanism.

How does the Affordable Care Act affect health care costs?

While the Affordable Care Act (ACA) has been largely defined by its coverage expansions, its authors recognized the need to include mechanisms to slow the growth of health care costs. The law’s provisions took aim at Medicare spending and to a lesser extent, factors that affect costs in the individual and group private market. To understand the law’s impact and potential to “bend the cost curve,” it is important to isolate the effects of the ACA from those attributable to the economic recession and recovery. Although the ACA’s future is in doubt, cost containment will remain a key ingredient of any health reform effort. In this brief, we discuss key ACA provisions and their effects on containing overall cost growth and the cost of ACA-related gains in coverage.

How many ACOs were there in 2015?

For example, the ACA promoted ACOs as both a quality improvement and cost containment mechanism. In 2015, more than 400 ACOs in the Pioneer ACO Model and the Medicare Shared Savings Program generated $429 million in savings, but bonuses paid to high-performing ACOs produced a net loss of $216 million. ACOs with more experience tend to perform better over time.

How did the ACA save money?

One of the most immediate and direct ways that the ACA produced savings was through reductions in provider payment updates and Medicare Advantage (MA) payments. Prior to the ACA, payments to MA plans were 14 percent higher than the cost of covering similar beneficiaries under the traditional Medicare program, according to the Medicare Payment Advisory Commission. The ACA reduced payments to MA plans over six years, and by 2016, payments to MA plans were just two percent higher than costs in the traditional Medicare program. Although critics were concerned that these cuts would mean that plans withdrew from the program, according to Kaiser Family Foundation, enrollment actually increased from 24 percent in 2009 to 31 percent in 2016. The payment reductions produced short-term federal savings of $68 billion between 2011 and 2016.

What is the ACA regulation?

These include a prohibition on lifetime and annual caps on coverage, a mandate to cover “essential health benefits,” premium rate review, and the Medical Loss Ratio (MLR) provision, which required insurers to provide a customer rebate if they spend too high a percentage of premium dollars on non-medical expenditures . It is difficult to tease out the countervailing effects of these regulations on health care costs, especially because the provisions affect the individual, small group, and large group markets differently.

What are some examples of ACA?

Some of the most prominent examples include the Hospital Readmissions Reduction Program (HRRP); Accountable Care Organizations (ACOs) through the Medicare Shared Savings Program and Pioneer Program; primary care medical homes; and bundled payment models. This emphasis on moving to value-based reimbursement dovetails with changes in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which mandated that Medicare move from fee-for-service to alternative payment models, such as those with risk-sharing arrangements or reimbursement tied to quality measures.

How many people have gained health insurance since the ACA?

history. In 2010, 16 percent of all Americans were uninsured; by 2016, the uninsured rate hit an all-time low of 9 percent. About 20 million Americans have gained health insurance coverage since the ACA was enacted. The ACA’s coverage gains occurred across all income levels and among both children and adults, and disparities in coverage between races and ethnicities have narrowed.

How has the Affordable Care Act changed the health care system?

Since then, the law has transformed the American health care system by expanding health coverage to 20 million Americans and saving thousands of lives. The ACA codified protections for people with preexisting conditions and eliminated patient cost sharing for high-value preventive services. And the law goes beyond coverage, requiring employers to provide breastfeeding mothers with breaks at work, making calorie counts more widely available in restaurants, and creating the Prevention and Public Health Fund, which helps the Centers for Disease Control and Prevention (CDC) and state agencies detect and respond to health threats such as COVID-19.

What were the barriers to women's health insurance?

Insurers in the individual market could charge women up to 1.5 times more than men for health insurance, a discriminatory practice known as gender rating , and insurers treated pregnancy as a preexisting condition. Plans could also exclude critical women’s health benefits from coverage: In 2011, 62 percent of individual market enrollees were in plans without maternity coverage. The ACA outlawed gender rating and prohibited insurers from discriminating against people with preexisting conditions. The latter is a crucial protection for women: About 1 in 2 girls and nonelderly women have a preexisting condition.

What does the ACA guarantee mean?

The ACA also established guaranteed issue, meaning that insurers must issue policies to anyone and can no longer turn away people based on health status.

What is the ACA requirement for preexisting conditions?

Another crucial protection for people with preexisting conditions is the ACA’s requirement that plans include categories of essential health benefits, including prescription drugs, maternity care, and behavioral health . This prevents insurance companies from effectively screening out higher-cost patients by excluding basic benefits from coverage. The law also banned insurers from setting annual and lifetime limits on benefits, which had previously prevented some of the sickest people from accessing necessary care and left Americans without adequate financial protection from catastrophic medical episodes.

Why is Medicaid expansion important?

Medicaid expansion is particularly important for coverage and the sustainability of the health care system in rural areas . Rural residents are more likely to be covered by Medicaid: 22.5 percent of rural Americans have Medicaid coverage, including nearly half of all rural children. Medicaid expansion reduced the amount of uncompensated care that hospitals provide, boosting the financial viability of rural hospitals relative to their counterparts in nonexpansion states. While more than 100 rural hospitals have closed in the past decade, the closures have occurred disproportionately in nonexpansion states.

How many people are covered by the ACA?

Together, these programs now cover tens of millions of Americans. Nationwide, 11.4 million people are enrolled in plans for 2019 coverage through the ACA health insurance marketplaces. Medicaid expansion currently covers 12.7 million people made newly eligible by the ACA, and the ACA’s enrollment outreach initiatives generated a “ welcome-mat ” effect that spurred enrollment among people who were previously eligible for Medicaid and CHIP.

How does ACA help the health care system?

ACA promotes health and wellness for beneficiaries by emphasizing prevention, quality, and care coordination. It also benefits the families of Medicare beneficiaries by extending access to health insurance coverage to millions of uninsured individuals, and by protecting everyone against insurance company practices that deny health insurance coverage to people when they need it.

When did the Affordable Care Act become law?

Since the landmark Affordable Care Act (ACA) was signed into law on March 23, 2010, [1] it has increased access to needed health services, reduced costs and improved care for millions. Yet, as this progress continues and the law’s most impactful provisions near implementation, threats to the law continue, through repeal efforts, budget cuts and legal challenges.

Is the ACA good for Medicare?

As the Center has said since it was signed into law, ACA is good for Medicare and good for families that depend on it. It is saving older and disabled Americans thousands of dollars a year and strengthening the solvency of Medicare.

What would happen if the ACA was struck down?

A: If the ACA were struck down completely by the Court, without immediate action by Congress, more than 20 million Americans would lose their health insurance. The marketplaces and Medicaid expansion would go away, along with billions of dollars in federal funding, and the law’s protections for pre-existing conditions would be removed.

What will happen if the Democrats control the Senate?

If the Democrats do manage to claim narrow control of the Senate, there will be a lot more on the table, including a possible public health insurance option on the ACA marketplace, increased generosity of premium subsidies, and legislation to improve the affordability of prescription drugs.

Is Medicaid expanding in the remaining 12 states?

A: Without a doubt, it would be to expand Medicaid in the remaining 12 states that haven’t yet opted to do so. There are 2 to 3 million low-income adults in those states in the so-called “coverage gap.” These are people with a heavy burden of chronic conditions, who are disproportionately people of color, and who have no real way to afford health insurance under the current system due to the decisions made by their state leaders. Expanding Medicaid in those states—as the ACA drafters initially intended—would provide an immediate benefit in terms of public health, financial security, and health equity.

How does the ACA affect health insurance?

Replacing the ACA’s subsidies with flat tax credits, while retaining the popular insurance rating provisions, could lead to the collapse of health insurance markets. Eliminating coverage expansions while retaining provider payment cuts could devastate the health care safety net. The combination of reduced coverage and a diminished safety net would put new pressures on public health departments. Rather than emphasizing population health, they would once again become providers of last resort. Those concerned with public health and with access to preventive, curative, and palliative care for vulnerable populations should monitor proposed designs very carefully.

What would happen if the ACA replacement was passed?

In addition to the early expansion components, many ACA replacement proposals would retain the restrictions against insurers’ charging higher premiums to sicker people, while eliminating or changing the nature of the premium tax credits and Medicaid expansion. For example, some proposals offer flat tax credits adjusted only for age, which increase only at a predefined rate regardless of community-wide premium growth.12These scenarios could leave many Americans worse off than they had been before the ACA was passed.

What would happen if the Medicaid expansions were repealed?

Recall that providers accepted the existing payment reductions in return for the combination of reduced uncompensated care costs and higher expected revenue from newly insured patients. Hospitals’ experience since 2014 suggests that this tradeoff—lower payments in exchange for higher paid volume—was justified, and the gains were realized. If the Medicaid expansions were to be repealed, these providers would face an even greater burden of uncompensated care. If the subsidies were repealed, providers would face losses in revenue from substantial declines in the number of insured patients. Both of these forces would exacerbate the effects of the continuing payment cuts.

How much did the ACA cost in 2016?

As of October 2016, 31 states and Washington, DC, have taken advantage of this opportunity, at a federal cost of $74 billion in 2016.6. The ACA overall reduced the federal deficit.

What would happen if the ACA was repealed?

The ACA generated large, widespread coverage gains. If the entire act were repealed, these coverage gains would disappear, and the share of the US population lacking insurance coverage, which had increased steadily from 2001 through 2011, would resume its upward climb.

What are the provisions of the ACA?

These provisions have continuing bipartisan support—unfortunately, they had modest impacts. One provision mandated that young adults be made eligible for coverage on their parents’ employer-sponsored health plans. This extension of eligibility expanded insurance coverage by between one and three million people. Another provision created a temporary program of high-risk pools—the Pre-existing Condition Insurance Plan—which offered subsidized coverage to those with serious chronic health conditions. It ultimately enrolled some 130 000 people, albeit at a very high cost per person. The limited effect of the Pre-existing Condition Insurance Plan on coverage mirrored previous experience with similar high-risk pools, which had existed in 34 states: they were difficult and costly to operate and ultimately enrolled only about 200 000 people nationwide.3

How much did the federal government spend on subsidies in 2016?

The subsidies and related spending represent a substantial federal commitment—$43 billion in 2016—to helping middle-income Americans afford coverage. New subsidies were accompanied by new regulations in the private insurance market.

What did the ACA do to Medicare?

Payment reductions. The ACA reduced the annual increases in payments to hospitals under the traditional Medicare program. It also reduced payments to Medicare Advantage plans. Partly because of these measures, increases in Medicare expenditures have been 20 percent lower than projected since the law was enacted.

What is the impact of the ACA?

While evidence for the impact of the ACA’s payment and delivery system reforms is far from robust, some of the best evidence concerns the relationship between prices and costs throughout the health care system. The effectiveness of payment reductions in Medicare, for example, suggests that private payers could see similar savings if they are able to reduce prices.

What is an ACO?

An ACO is a voluntary organization formed by health care providers that agree to take responsibility for the quality and costs of care for a population of patients. Multiple studies suggest that ACOs have generated modest net savings of up to 2 percent for Medicare while maintaining or improving quality.

What is the ACA experiment?

Primary care. The ACA launched a number of experiments to strengthen the nation’s primary care infrastructure. While most of these experiments produced mixed results, the Independence at Home Demonstration, which provides intensive primary care for homebound patients, had the most promising results. Evaluations showed a significant decrease in emergency department visits and hospitalizations, increased patient and caregiver satisfaction, and a decrease in Medicare expenditures.

What is the positive outcome of the ACA?

The institutionalization of research and development at CMS through the Center for Medicare and Medicaid Innovation has been another positive outcome of the ACA. The program offers hope that CMS can learn from experiments in payment and delivery system reform.

What was the trend in healthcare in 2010?

Trends in cost and quality. From 2010 to 2017, annual average national per capita health care spending increased by 3.6 percent, a relatively modest amount by historical standards. Medicare spending also fell from 2010 to 2018. Although the ACA did not specifically target private sector spending, premiums for employer-sponsored insurance increased at a relatively modest annual average rate. Meanwhile, there were improvements on more than half of the measures that track quality of care. However, linking developments in the cost and quality of care to specific provisions of the ACA is challenging.

What is the Affordable Care Act?

The Affordable Care Act (ACA) launched potentially groundbreaking changes in how health care is paid for and delivered in the United States. In the second of two health policy reports for the New England Journal of Medicine, the Commonwealth Fund’s David Blumenthal, M.D., and Melinda Abrams reviewed the ACA’s major reforms in payment ...

The Trajectory of National Health Spending

Key Cost-Containment Provisions

• Medicare Reforms
  One of the most immediate and direct ways that the ACA produced savings was through reductions in provider payment updates and Medicare Advantage (MA) payments. Prior to the ACA, payments to MA plans were 14 percent higher than the cost of covering similar beneficiari…
• Private Market Insurance Reforms
  The ACA includes a slew of new regulations affecting the private insurance market, both on and off the exchanges. These include a prohibition on lifetime and annual caps on coverage, a mandate to cover “essential health benefits,” premium rate review, and the Medical Loss Ratio (…

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Where We Are and What We Don’T Know

Policy Considerations Moving Forward